Synopsis
South Korea has been ranked 29th among 37 major economies in GDP growth for Q4 2024, primarily due to weak domestic demand and political uncertainty, according to a central bank report.Key Takeaways
- South Korea's GDP growth reached 0.066% in Q4 2024.
- Ranked 29th out of 37 economies, near the bottom.
- Political instability has affected consumer confidence.
- Exports declined by 9.1% in January 2025.
- Bleak outlook for Q1 2025 with potential for negative growth.
Seoul, April 6 (NationPress) South Korea has been placed 29th out of 37 major economies regarding economic growth for the fourth quarter of 2024, as a combination of weak domestic demand and rising political uncertainty negatively impacted the nation's economic performance, according to a report released by the central bank on Sunday.
As Asia's fourth-largest economy, South Korea recorded a real gross domestic product (GDP) growth of 0.066 during the October-December timeframe, positioning it near the bottom of the list among 36 OECD member countries and China, as per findings from the Bank of Korea (BOK).
Ireland led the rankings with a growth rate of 3.613 percent, followed by Denmark at 1.849 percent, Turkey at 1.688, China at 1.6 percent, and Portugal at 1.542 percent, as reported by Yonhap news agency.
The United States saw an expansion of 0.607 percent, ranking 17th, while Japan grew by 0.556 percent, placing 20th.
South Korea's real GDP growth has been on a consistent decline since the second quarter of last year, dropping to 32nd place with a negative 0.228 percent, down from sixth place with a growth of 1.3 percent in the previous quarter.
Although there was a slight recovery to 26th in the third quarter with 0.1 percent growth, momentum weakened again by year-end.
The BOK indicated that the sluggish growth in the fourth quarter was due to ongoing low domestic demand, where both private consumption and construction investment remained in a protracted slump.
Political instability, worsened by former President Yoon Seok Yeol's brief declaration of martial law in December, further undermined consumer confidence and investor sentiment.
Looking ahead, the outlook for the first quarter of 2025 appears grim.
Domestic demand continues to weaken, and export momentum seems to be diminishing even before the full impact of U.S. President Donald Trump's tariff policies is felt.
According to recent BOK statistics, South Korea's exports totaled $49.81 billion in January, reflecting a 9.1 percent decrease from the previous year. This marks the first year-on-year decline in 16 months, since September 2023, which recorded a 1.6 percent drop.
Consequently, analysts are doubtful about the central bank's forecast of 0.2 percent growth for the first quarter of this year.
"Based on economic indicators through February, South Korea is projected to achieve only 0.1 percent growth in the first quarter," stated Park Jeong-woo, an economist at Nomura Securities. "Given the persistent slump in domestic demand and weakening exports, there is even a possibility that the country could experience negative growth."
